annual report 2016 - nissan motor corporation global · pdf fileit also provides an...

ANNUAL REPORT 2016

CONTENTS TOP MESSAGECORPORATE FACE TIME

Go back one page Jump to information on the web

Return to previously viewed page

Go forward one page

l Section Tabs

l Navigation Buttons l Link Buttons

CONTENTS

Viewing this Report

This Annual Report is an interactive PDF. You can use the navigation tabs and buttons to access the information you need.

This annual report presents the results of Nissan Motor Corporation’s business activities for fiscal 2015. It also provides an opportunity for investors to deepen their understanding of the Nissan management team. President and CEO Carlos Ghosn and CFO Joseph G. Peter share their vision of Nissan’s philosophy and the direction the Company is heading today.

Cover photo: Q60

Click the tabs to jump to the top page of each section.

■ Financial DataTo obtain more detailed financial information,please visit our IR website.

■ This annual report contains forward-looking statements on Nissan’s plans and targets, and related operating investment, product planning and production targets. Please note that there can be no assurance that these targets and plans will actually be achieved. Achieving them will depend on many factors, including Nissan’s activities and development as well as the dynamics of the automobile industry worldwide and the global economy.

■ For further information, please contact:Nissan Motor Co., Ltd. Investor Relations Department1-1, Takashima 1-chome, Nishi-ku, Yokohama-shi, Kanagawa 220-8686, JapanTel: +81 (0)45-523-5520Fax: +81 (0)45-523-5771E-mail: [email protected]

Global Corporate Communications DepartmentGlobal Communications Division

Tel: +81 (0)45-523-5552Fax: +81 (0)45-523-5770

website

01NISSAN MOTOR CORPORATION ANNUAL REPORT 2016

http://www.nissan-global.com/EN/IR/

Nissan: Enriching People’s LivesNissan has a clear vision for the future, and − with our Alliance partner, Renault − we are working with passion to achieve it. Our mission is to enrich people’s lives, building trust with our employees, customers, dealers, partners, shareholders and the world at large.

Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders* in alliance with Renault.

* Our stakeholders include customers, shareholders, employees, dealers and suppliers, as well as the communities where we work and operate.

VISION MISSION


2015 2014 2013 2012*2 2011For the years ended Mar. 31, 2016 Mar. 31, 2015 Mar. 31, 2014 Mar. 31, 2013 Mar. 31, 2012

Net sales*1 Millions of yen 12,189,519 11,375,207 10,482,520 8,737,320 9,409,026

Ordinary income Millions of yen 862,272 694,232 527,189 504,421 535,090

Net income attributable to owners of parent Millions of yen 523,841 457,574 389,034 341,117 341,433

Comprehensive income Millions of yen 75,107 719,903 796,533 721,860 290,600

Net assets Millions of yen 5,140,745 5,247,262 4,671,528 4,036,030 3,449,997

Total assets Millions of yen 17,373,643 17,045,659 14,703,403 12,442,337 11,072,053

Net assets per share Yen 1,132.61 1,152.83 1,035.06 890.38 750.77

Basic net income per share Yen 125.00 109.15 92.82 81.39 81.67

Diluted net income per share*3 Yen 124.99 109.14 92.82 - -

Net assets as a percentage of total assets % 27.2 28.4 29.5 30.0 28.4

Return on equity % 11.0 10.0 9.6 9.9 11.2

Price earnings ratio Times 8.33 11.21 9.91 11.08 10.79

Cash flows from operating activities Millions of yen 927,013 692,747 728,123 412,257 696,297

Cash flows from investing activities Millions of yen (1,229,280) (1,022,025) (1,080,416) (838,047) (685,053)

Cash flows from financing activities Millions of yen 530,606 245,896 396,925 433,817 (308,457)

Cash and cash equivalents at end of fiscal year Millions of yen 992,095 802,612 832,716 711,901 840,871

Employees*4 Number 152,421 149,388 142,925 130,274 157,365

(19,007) (20,381) (21,750) (22,442) (34,775)

( ) represents the average number of part-time employees not included in the above numbers 154,700 151,710 147,939 136,625 161,513

(19,343) (20,748) (22,642) (23,307) (35,099)

Notes:*1 Net sales are presented exclusive of consumption tax.*2 Effective from fiscal 2013, International Financial Reporting Standards (IFRS) 11 Joint Arrangements, which was released on May 12, 2011, and International Accounting Standards (IAS) 19 Employee Benefits,

which was released on June 16, 2011, have been applied in some foreign subsidiaries and affiliates, and key financial data and trends for fiscal 2012 are adjusted.*3 Diluted net income per share for fiscal 2011 and fiscal 2012 is not presented because the Company had no securities with dilutive effects.*4 Staff numbers, which are presented as the lower numbers in the “Employees” line, include those of unconsolidated subsidiaries accounted for by the equity method as reference data.

FINANCIAL HIGHLIGHTS


(Billions of yen) (Billions of yen)

Net IncomeNet Sales

Free Cash Flow (Auto Business)

Operating Profit

Net Cash (Auto Business)

(Billions of yen)

(Billions of yen) (Billions of yen)

(FY) (FY) (FY)

(FY) (FY)

■ Management pro forma basis*

■ China JV Equity basis









Dividend per Share

(Yen)

(FY)

Net sales climbed 814.3 billion yen for the year to reach 12,189.5 billion yen. Operating profit was 793.3 billion yen, for a profit margin of 6.5%.Under the forecast of consolidated operating results after fiscal 2013, the consolidation method for Dongfeng Motor Co., Ltd. has been changed from proportionate consolidation to the equity method in comparison with the results until fiscal 2012 by the adoption of IFRS11.

Key figures for fiscal 2015(China JV Equity Basis)

* Based on continuation of proportionate consolidation of China JV

0

30

20

50

40

10

2011 2012 2013 2014 2015

20

25

3330

42

0

100

200

300

400

500

2011 2012 2013 2014 2015

379.5

208.1

352.3 365.8

199.7

248.6

497.6481.2

0

1,350

900

1,800

450

20132011 2012 2014 2015

619.8

915.9

1,133.7

1,524.51,390.1

1,015.9

1,645.8

1,502.9

3,000

6,000

9,000

12,000

15,000

02011 2012 2013 2014

9,409.0 9,629.6

11,434.812,406.3

11,375.210,482.5

13,365.6

12,189.5

20150

1,000

800

200

400

600

2011 2012 2013 2014 2015

545.8 523.5

605.7

718.6

498.4

589.6

935.5

793.3

300

150

450

600

02011 2012 2013 2014 2015

341.4 342.4

389.0 389.0

457.6 457.6

523.8 523.8


Carlos GhosnPresident and Chief Executive Officer

DEAR FELLOW SHAREHOLDERS

Fiscal 2015 was a year of continued progress at Nissan Motor Corporation (NMC). Once again we

delivered solid financial results for our shareholders by launching innovative vehicles, pioneering new

technologies and disciplined focus on cost-efficiency.

I would like to thank all of our employees, our suppliers, dealers, Alliance partners and my

management colleagues for their contribution to our strong financial performance this year. Our

results reflect Nissan’s underlying quality and resilience, and I look ahead with bright optimism–for

our customers, for our employees, and of course, for our shareholders.

Driving Shareholder Returns

As a global team, we have worked together to design, develop, assemble, market, sell and service a

range of vehicles with strong customer appeal. This helped to drive strong demand in North America

and a satisfactory performance in Europe, excluding the significant market contraction in Russia.

Together with continued cost efficiencies and Alliance synergies, this helped offset the negative

impact of adverse currency movements and volatile conditions in some of the other markets.

This, in turn, has produced robust shareholder returns. Over the past five years, our annual

dividend payment has more than doubled: rising from 20 yen per share in fiscal 2011 to a proposed

payout of 48 yen per share for fiscal 2016. This represents a 14.3% increase on the fiscal 2015

dividend payment. In February 2016, we further underlined our commitment to total shareholder

returns by announcing a share buy-back worth up to 400 billion yen.

As set out in the detailed financial statements in this Annual Report, the Company increased

revenues by 7.2% to 12.2 trillion yen in the 12 months to March 31, 2016, and generated sharply

increased operating profits of 793.3 billion yen. Net income rose by 14.5% to 523.8 billion.

Pathway to Power 88

Our confidence reflects the progress that Nissan has achieved since launching the Power 88 plan five

years ago. Since then, our annual unit sales have increased by more than 1.2 million units to 5.4 million.

In spite of several challenges in recent years – from emerging market and currency volatility to

geo-political tensions – our continued focus on cost efficiencies and our ongoing product offensive

have helped lift operating margins towards the 7% level reported for the latest fiscal year. This signals

that we are on the right path toward the goal of a sustainable 8% operating profit margin.

Products & Efficiency

We are far from complacent. We must continue to launch strong new products and relentlessly improve

efficiency and quality.

This is particularly important in Japan where we are refreshing some core models, notably with the

launch of a new compact car featuring our latest electric vehicle powertrain.

This new electric vehicle will meet consumer demand for greater autonomy and fuel efficiency,

utilizing a new “e-Power” system that matches the agility, quietness, strong acceleration and efficiency

of the Nissan LEAF.


During the current fiscal year, we will launch our latest generation autonomous drive technology in

Japan, known as Pro Pilot. This system will build on our existing forward emergency braking technologies

by offering automated single-lane controls in highway, making driving safer and more efficient.

We also anticipate that our presence in Japan – and beyond – will be strengthened by our

proposed strategic alliance with Mitsubishi Motors (MMC), in which Nissan is planning to take a 34%

stake for 237 billion yen.

Pending regulatory approvals for this transaction, we will be able to work together in areas

including purchasing, common platforms, the shared development of new technologies, joint plant

utilization and growth markets.

Our interest in MMC reflects our long-term confidence in alliances to deliver synergies in areas

such as engine development and shared vehicle architectures.

Alliances

The bedrock of our Alliance strategy is our 17-year partnership with Renault.

Renault-Nissan synergies exceeded 4 billion euros in fiscal 2015 and will continue to increase

as we implement convergence in purchasing, manufacturing and logistics, engineering and human

resources. We are targeting 5.5 billion euros by fiscal 2018.

These synergies will be achieved through efficiencies on the cost side and shared revenue

opportunities from assets such as the Common Module Family with Renault and our partnership with

Daimler in shared powertrains and vehicle architecture.

The Renault-Nissan Alliance will also be an important platform for our expansion in autonomous

drive technologies and connected vehicles.

New Technology

Nissan is driving change throughout the auto industry. We are changing the driving experience with our

“Intelligent Mobility” vision, which will streamline our efforts to deliver Electric Vehicles, Autonomous

Drive, Connected Vehicles, and many other cutting-edge products.

In electric vehicles, we created the zero-emission segment five years ago with the launch of the

all-electric Nissan LEAF, of which we have now sold more than 200,000 units worldwide.

The 2016 LEAF model has been enhanced by a new 30-kilowatt battery that extended its driving

range by more than 20%. This extended range and the growing availability of fast-charging locations in

leading markets will enable more zero-emission journeys.

By the end of the decade, Nissan plans to offer more connected cars, introducing systems and

features that will make driving safer, more productive and enjoyable. By 2020, the Renault-Nissan

Alliance plans to launch more than 10 models with autonomous drive technologies.

Conclusion

As the automotive world evolves, Nissan is making positive changes everywhere: for every consumer, for

every market, and in every part of our business. We are driving a transformation in the way vehicles are

designed, developed, produced and sold in markets around the world. We are harnessing the power that’s

inside Nissan to prepare solutions that our customers will want and value, now and in the years to come.

The future is bright for our company. Our efforts in cost-efficiency, new products and technologies,

Alliances, market focus and greater focus on revenue optimization and customer satisfaction will, we

believe, underpin a solid performance in the current year and beyond.

Thank you again for your support.

Carlos GhosnPresident and Chief Executive OfficerNissan Motor Co., Ltd.


Joseph G. PeterChief Financial Officer

MESSAGE FROM THE CFO

Nissan Motor Corporation delivered another solid year of improvement in business and financial results in fiscal 2015 despite negative foreign exchange rate movements and slowing sales in some regions, particularly emerging markets.

The improvement in the 12 months to March 31, 2016 was driven by the combination of growing unit sales and continued efficiencies on the cost side of the business. On the sales front, our global unit sales reached 5.4 million units, an all-time record. The Company enjoyed strong growth in North America and solid demand in Western Europe, where sales of popular models including the Altima, Rogue, Sentra, Qashqai and other core products offset difficult conditions in several parts of the world.

We also maintained our intense focus on cost-efficiency, which contributed 223.6 billion yen in year-over-year operating profit improvement, mainly through our purchasing material cost-reduction efforts.

In terms of financial performance (based on the equity accounting method for our Chinese joint venture) , consolidated net revenues increased by 814.3 billion yen to 12.2 trillion yen. Operating profit rose by 34.6% to 793.3 billion yen, which represented an operating profit margin of 6.5%. Net income grew by 14.5% to 523.8 billion yen for the year, also reaching an all-time record.

Nissan generated automotive free cash flow of 481.2 billion yen and we continued to strengthen the balance sheet, ending the period with net cash of 1.5 trillion yen for our automotive business.

On a management pro-forma basis, which includes the proportional consolidation of our Chinese joint venture, and is consistent with the methodology used in developing the Nissan Power 88 Mid-term Plan objectives – net revenues increased by 7.7% to 13.4 trillion yen.

Pro-forma operating profit rose by 30.2% to 935.5 billion yen representing a 7.0% operating profit margin. On this measure, we ended the fiscal period with net cash from our automotive operations of 1.65 trillion yen. With cumulative free cash flow totaling 1.7 trillion yen at the end of the year, we exceeded the Power 88 target of 1.5 trillion yen a full 12 months ahead of the mid-term plan.

This positive performance provides a solid base as we follow the path toward our Power 88 goals.Looking toward fiscal year 2016, we anticipate total industry volumes will increase slightly to 89.4

million units. Of that total, we project that Nissan’s global retail volumes will rise by 3.3% to 5.6 million units, driven primarily by growth in China and North America.

We expect net revenues to be 11.8 trillion yen for the 12 months ending March 31, 2017, calculated under the equity accounting method for our joint venture in China. Operating profit is expected to reach 710 billion yen, representing a margin of 6.0%. Net income is forecast to reach 525 billion yen. These figures reflect challenging assumptions on foreign exchange rates, particularly on yen-dollar currency translation.

On the “management pro-forma” basis including the proportional consolidation of our Chinese joint venture, we anticipate net revenues will be 13 trillion yen. Operating profit is forecast to reach 860 billion yen, resulting in an operating profit margin of 6.6%. Net income is estimated to be 525 billion yen.

Our financial priorities remain focused on ensuring sustainable profitable business growth, generating positive automotive free cash flow and maintaining a strong balance sheet with sufficient levels of liquidity.

Under our mid-term plan, Nissan is committed to maintaining a progressive dividend policy, which reflects our profitability and solid free cash-flow generation. Given our solid financial performance in the period covered by this Annual Report, we have proposed a 14.3% increase in the full-year dividend to 48 yen per share for FY16. This distribution remains in line with our commitment to a minimum payout ratio of 30%.

Total shareholder returns will be further enhanced through the stock buy-back, announced in February, of 300 million shares valued at up to 400 billion yen throughout this year.

In summary, Nissan has delivered another fiscal year of solid financial results despite challenging conditions in several markets and recent unfavorable currency movements. We remain confident that Nissan has the underlying strength, the right products, the strategic focus and the discipline to continue to drive the Company forward, while facing the challenges ahead.

In this regard, while we have adopted a challenging forecast for likely currency movements – particularly in the yen-dollar exchange rate – we expect Nissan to deliver further solid earnings and attractive shareholder returns in fiscal 2016.

Joseph G. PeterChief Financial Officer


THE MID-TERM PLAN “NISSAN POWER 88”

1

Strengthening brand power

4

Zero-emission leadership

2

Enhancing sales power

5

Business expansion

3

Enhancing quality

6

Cost leadership

SIX STRATEGIES UNDER NISSAN POWER 88

Our commitment is to renew our focus on the overall customer experience, elevating Nissan’s brand power and ensuring quality excellence for every person who buys a Nissan car. “88” denotes the measurable rewards from achieving our plan. We aim to achieve a global market share of 8% from 5.8% in 2010 and to increase our corporate operating profit to a sustainable 8%* from 6.1% in 2010.

Nissan is operating its business based on the mid-term plan, Nissan Power 88, for the fiscal years 2011 to 2016. “Power” derives its significance from the strengths and efforts we will apply to our brands and sales.

Nissan is implementing six strategies under Nissan Power 88.Together with a stronger brand, investments in products, technologies and global capacity, we aim to achieve Nissan Power 88 and grow further.

* Management pro forma basis based on continuation of proportionate consolidation of China JV


As the industry leader in zero-emission mobility, Nissan is committed to the penetration of electric vehicles (EVs) in the market. It is also striving to achieve virtually zero fatalities and serious injuries in accidents involving its vehicles.

Nissan’s “Double Zero” Target

Zero EmissionsThe Nissan LEAF is the best-selling EV in the world. This year, the Company achieved cumulative global sales of more than 200,000 vehicles. The 2016 LEAF model is enhanced by a new 30-kilowatt battery that extends its driving range by more than 20%.

Zero FatalitiesAutonomous Drive technologies will provide a platform for Nissan to pursue its ultimate vision of achieving virtually zero fatalities. In 2016, Nissan will introduce an automated system intended to allow the car to drive autonomously in heavy, stop-and-go traffic. By 2018, we will introduce new technologies that enable cars to autonomously negotiate hazards and change lanes.

By 2020, the Company aims to be ready to introduce automated technology allowing vehicles to navigate without driver intervention in a variety of situations, including complex city driving. Meanwhile, Nissan’s Safety Shield technologies are fundamental to autonomous driving. As of fiscal 2015, Forward Emergency Braking is available on nearly all vehicles categories sold in Japan.

ero emission & Zero fatality


3,000

1,000

2,000

4,000

6,000

5,000

0

6.0

2.0

4.0

8.0

12.0

10.0

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015

5,600

6.3%

3,483

5.4%

3,770

5.4%

3,411

5.5%

3,515

5.5%

4,518

5.8%

4,845

6.4%

4,914

6.2%

5,188 5,318

2016

5,423

6.2% 6.2% 6.2%

6,0005,0004,0003,0002,0001,0000

5,423

5,600+3.3%　

835 754 2,011 (1,517) 1,250 573

880 770 2,070 (1,570) 1,300 580

FISCAL 2015 SALES PERFORMANCE AND FISCAL 2016 SALES OUTLOOK

Global demand in fiscal 2015 reached 87.15 million vehicles, up 2.1% from fiscal 2014. Nissan’s global sales volume climbed 2.0 % to 5.423 million vehicles and global market share was 6.2%, equal to fiscal 2014.

For fiscal 2016, Nissan expects to grow faster than the industry as a whole. We anticipate that total industry volumes will increase by 2.6% to 89.40 million units. Our global retail volumes are expected to rise by 3.3% to 5.60 million units. This would equate to a global market share of 6.3%, an increase of 0.1 percentage points compared to 2015.

Sales Performance and Sales Outlook by Regions

(FY)

(Units: thousands) （％）

Japan+1.3%

China+4.0%

North America+2.9% (U.S.+3.5%)

Europe+2.2%

Other Markets+5.3%

(Forecast)

FY2015

FY2016

(Units: thousands)

(Forecast)

Global Retail Sales Performance / Market Share and Global Sales Outlook


1,250＊1,2471,080

1,216 1,222

1,300＊+4.0%

2011 2012 2013 2014 2015 2016

500

1,000

2,000

1,500

0

1,517

1,079 1,1381,285

1,400

1,570+3.5%

2011 2012 2013 2014 2015 2016

500

1,000

2,000

1,500

0

754676 660 676 755770

+2.2%

2011 2012 2013 2014 2015 2016

500

1,000

2,000

1,500

0

835825960

879 889880

+5.3%

2011 2012 2013 2014 2015 2016

500

1,000

2,000

1,500

02011 2012 2013 2014 2015 2016

573655 646 719

623580

+1.3%

500

1,000

2,000

1,500

0(Forecast)

(FY)

(Units: thousands)

(Forecast)(FY)

(Units: thousands)

(Forecast)(FY)

(Units: thousands)

(Forecast)(FY)

(Units: thousands)

NP300 Navara

DatsunGO+PancaQashqaiAltimaSylphy

Sales in Other MarketsSales in Europe (Including Russia)Sales in United StatesSales in China

Other Markets Total Sales Volume: 835 thousand units

Europe Total Sales Volume: 754 thousand units

United States Total Sales Volume: 1,517 thousand units

China Total Sales Volume: 1,250 thousand units

X-Trail

(Forecast)(FY)

Sales in Japan

(Units: thousands)

Japan Total Sales Volume: 573 thousand units

SALES VOLUME AND SALES OUTLOOK BY REGIONS

* PV: Retail sales base, LCV: Wholesale base

Asia and Oceania 357

Latin America 171

Middle East 207

Africa 99

Sales by Region (Units: thousands)


589.6

793.3+113.3 –72.4 –24.4 –19.7 –3.4

–13.3 +223.6

545.8 523.5605.7

498.4

718.6793.3

589.6

935.5

710.0

860.0

2016201520142012 20132011

600

800

1,000

0

200

400

(Forecast)

(Billions of yen)

(FY)

Operating Profit

(Billions of yen)

341.4 342.4

389.0

457.6

523.8600

450

300

150

02016201520142012 20132011

525.0

(Forecast)

(Billions of yen)

(FY)

Net salesFor fiscal 2015, consolidated net sales increased 7.2%, to 12.19 trillion yen.

Operating profitConsolidated operating profit totaled 793.3 billion yen, an increase of 34.6% from the previous fiscal year. In comparison to the previous fiscal year’s consolidated operating profit, the variance was due to the following factors:

l Foreign exchange rates had a negative impact of 13.3 billion yen.l Cost items including purchasing cost reduction

efforts, lower raw material costs and product enrichment resulted in savings of 223.6 billion yen.

l Volume and mix produced a positive impact of 113.3 billion yen.

l The increase in marketing and selling expenses resulted in a 72.4 billion yen negative movement.

l R&D expenses increased by 24.4 billion yen.l Manufacturing expenses increased by 19.7 billion

yen.l Other items had a negative impact of 3.4 billion

yen.

FISCAL 2015 FINANCIAL REVIEW AND FISCAL 2016 OUTLOOK

Net incomeConsolidated net income increased by 66.2 billion yen from 457.6 billion yen for the previous fiscal year to 523.8 billion yen for the fiscal year under review.

Fiscal 2015 Financial Performance (China JV Equity Basis)Impact on Operating Profit

FY14 O.P. Cost items*

* Including purchasing cost reduction, raw material and product enrichment.

Marketing & selling exp.

R&D exp.FOREX Volume/mix Mfg exp. Other items FY15 O.P.

Net Income


■ China JV equity basis





2016201520142012 2013

9,409.0

13,000.0

11,800.0

13,365.6

12,189.5 11,375.2

9,629.6

11,434.8

10,482.5

12,406.3

20110

5,000

10,000

15,000

(Forecast)

Net Sales

(Billions of yen)

(FY)



Balance sheet Total assets increased by 1.9% to 17,373.6 billion yen compared to March 31, 2015.

Current assets increased by 4.2% to 10,747.6 billion yen compared to March 31, 2015. This was mainly attributable to increases in sales finance receivables by 340.4 billion yen and cash on hand and in banks by 157.7 billion yen. Fixed assets decreased by 1.5% to 6,626.1 billion yen compared to March 31, 2015.

Current liabilities increased by 5.4% to 6,764.2 billion yen compared to March 31, 2015. This was mainly due to increases in commercial paper by 299.2 billion yen and current portion of bonds by 141.1 billion yen. Long-term liabilities increased by 1.6% to 5,468.7 billion yen compared to March 31, 2015. This was mainly due to increases in net defined benefit liability by 87.9 billion yen, long-term borrowings by 38.4 billion yen and deferred tax liabilities by 18.3 billion yen despite a decrease in bonds by 125.5 billion yen.

Net assets decreased by 2.0% to 5,140.7 billion yen compared to 5,247.3 billion yen as of March 31, 2015. This was mainly due to increases in translation adjustments (loss) by 335.6 billion yen and remeasurements of defined benefit plans (loss) by 73.8 billion yen and a decrease in unrealized holding gain and loss on securities by 31.6 billion yen despite an increase in retained earnings by 338.9 billion yen.

Free cash flow and net cash (auto business) For fiscal 2015, Nissan achieved a positive free cash flow of 481.2 billion yen. At the end of fiscal 2015, our net automotive cash improved from the previous fiscal year to 1,502.9 billion yen.

The Company continues to maintain a close focus on its inventory of new vehicles. Inventory stood at 790,000 units at the end of fiscal 2015. Nissan continues to manage inventory carefully in order to limit its impact on free cash flow.

Aa3 AA–

A1 A+

A2 A

A3 A–

Baa1 BBB+

Baa2 BBB

Baa3 BBB–

Ba1 BB+

Financial Position (China JV Equity Basis)

Corporate Ratings

Long-term credit ratingNissan’s long-term credit rating with Rating & Investment Information, Inc. (R&I) is A+ with a stable outlook. The Standard & Poor’s (S&P) long-term credit rating for Nissan is A– with a positive outlook. Nissan’s credit rating with Moody’s is A3 with a stable outlook.

4/15 10/15 4/164/05 10/05

R&I

S&P

Moody’s

4/06 10/06 4/07 10/07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 7/11 7/12 1/13 9/14


In our outlook for fiscal 2016, we expect our global sales to reach 5.60 million units, an increase of 3.3% compared to fiscal 2015.

With a total industry volume assumption of 89.40 million units, a 2.6% increase year on year, our global market share is expected to grow from 6.2% to 6.3%.

In consequence of our plan, the financial forecast is as follows. We have used a foreign exchange rate assumption of 105 yen to the dollar:

Nissan’s Fiscal 2016 Outlookn Net sales 11.80 trillion yenn Operating profit 710.0 billion yenn Net income 525.0 billion yen

Fiscal 2016 Outlook (China JV Equity Basis)

600

450

300

150

02011 2015 201620142012 2013

406.4

468.7

536.3

463.1

540.0

479.0

4.3%

5.4%

5.1%

4.1%4.6%

3.9%4.3%

5.4%

5.1%

4.1%4.6%

3.9%

600

450

300

150

02011 2016201520142012 2013

531.9560.0

428.0457.8

500.6 506.1

4.4%4.5%5.2%

4.8%4.4%

4.7%4.4%4.7%4.5%

5.2%4.8%

4.4%

(Forecast)

(Forecast)

(Billions of yen)

DividendNissan’s strategic actions reflect not only its long-term vision as a global company to create sustainable value but also the Company’s commitment to maximizing total shareholder returns.

We paid year-end cash dividends of 21 yen per share for fiscal 2015. As a result, the total dividend payment for fiscal 2015, combined with the 21 yen dividend for the interim period, was 42 yen per share.

The dividend payment plan for fiscal 2016 is to be 48 yen per share, considering the business condition, risks and opportunities for the year.

(FY)

Sales finance Due to the increase in retail sales, total financial assets of the sales finance segment increased by 4.7% to 9,719.9 billion yen from 9,281.3 billion yen in fiscal 2014. The sales finance segment generated 232.1 billion yen in operating profits in fiscal 2015 from 195.5 billion yen in fiscal 2014.

Investment policy The company used capital expenditures in order to ensure Nissan’s future competitiveness. In fiscal 2015, capital expenditures totaled 479.0 billion yen, which was 3.9% of net sales.

R&D expenditures totaled 531.9 billion yen. These funds were used to develop new technologies and products. One of the Company’s strengths is its extensive collaboration and development structure with Renault’s R&D team, resulting from the Alliance.

R&D Expenditures

50

40

30

20

10

02015 2016201420132011 2012

48

42

2025

3033

(Outlook)(FY)

Dividend per share

(Yen)

(Billions of yen)

Capital Expenditures

(FY)

■ Management pro forma basis*■ China JV equity basis

● % of net sales (Management pro forma basis*)● % of net sales (China JV equity basis)



FINANCIAL STATEMENTSConsolidated balance sheets (China JV Equity basis)

(Millions of yen)

FY2014As of March 31, 2015


Liabilities

Current liabilitiesTrade notes and accounts payable 1,554,399 1,479,689Short-term borrowings 1,022,613 1,037,271Current portion of long-term borrowings 1,376,780 1,350,894Commercial paper 200,692 499,875Current portion of bonds 216,942 357,998Lease obligations 23,043 14,916Accrued expenses 908,909 981,989Deferred tax liabilities 64 51Accrued warranty costs 112,989 106,536Other 1,001,064 934,968Total current liabilities 6,417,495 6,764,187

Long-term liabilitiesBonds 1,095,518 969,987Long-term borrowings 2,717,478 2,755,896Lease obligations 18,167 14,460Deferred tax liabilities 673,521 691,809Accrued warranty costs 129,365 138,107Net defined benefit liability 336,261 424,123Other 410,592 474,329Total long-term liabilities 5,380,902 5,468,711

Total liabilities 11,798,397 12,232,898Net assets

Shareholders’ equityCommon stock 605,814 605,814Capital surplus 804,567 805,646Retained earnings 3,811,848 4,150,740Treasury stock (148,239) (148,684)Total shareholders’ equity 5,073,990 5,413,516

Accumulated other comprehensive incomeUnrealized holding gain and loss on securities 95,600 64,030Unrealized gain and loss from hedging instruments 7,185 (4,486)Adjustment for revaluation of the accounts of the consolidated subsidiaries based on general price level accounting

(13,945) (13,945)

Translation adjustments (246,776) (582,363)Remeasurements of defined benefit plans (81,638) (155,487)Total accumulated other comprehensive income (239,574) (692,251)

Share subscription rights 2,294 502Non-controlling interests 410,552 418,978Total net assets 5,247,262 5,140,745

Total liabilities and net assets 17,045,659 17,373,643

(Millions of yen)



Assets

Current assetsCash on hand and in banks 761,074 918,771Trade notes and accounts receivable 888,814 837,704Sales finance receivables 6,312,874 6,653,237Securities 41,651 73,384Merchandise and finished goods 853,962 857,818Work in process 90,811 86,313Raw materials and supplies 365,224 330,435Deferred tax assets 226,891 251,689Other 851,168 825,080Allowance for doubtful accounts (75,124) (86,858)Total current assets 10,317,345 10,747,573

Fixed assetsProperty, plant and equipment

Buildings and structures, net 661,979 645,945Machinery, equipment and vehicles, net 3,121,627 3,182,514Land 643,940 625,152Construction in progress 265,119 196,718Other, net 573,574 566,573Total property, plant and equipment 5,266,239 5,216,902

Intangible fixed assets 114,456 130,877Investments and other assets

Investment securities 988,733 893,688Long-term loans receivable 14,569 7,747Net defined benefit assets 10,078 4,691Deferred tax assets 140,669 187,106Other 195,927 186,962Allowance for doubtful accounts (2,357) (1,903)Total investments and other assets 1,347,619 1,278,291

Total fixed assets 6,728,314 6,626,070Total assets 17,045,659 17,373,643


Consolidated statement of income (China JV Equity basis)

(Millions of yen)

FY2014(From April 1, 2014to March 31, 2015)


Net sales 11,375,207 12,189,519

Cost of sales 9,241,341 9,796,998

Gross profit 2,133,866 2,392,521Selling, general and administrative expenses

Advertising expenses 336,792 342,213Service costs 93,606 130,530Provision for warranty costs 133,567 137,941Other selling expenses 255,044 234,456Salaries and wages 392,969 393,739Retirement benefit expenses 17,511 16,137Supplies 4,222 3,901Depreciation and amortization 44,826 45,056Provision for doubtful accounts 52,079 63,586Amortization of goodwill 1,837 5,111Other 211,852 226,573Total selling, general and administrative expenses 1,544,305 1,599,243

Operating income 589,561 793,278Non-operating income

Interest income 25,323 26,467Dividends income 6,425 5,966Equity in earnings of affiliates 106,513 122,524Derivative income ― 37,683Exchange gain 66,185 ―Miscellaneous income 17,813 11,726Total non-operating income 222,259 204,366

Non-operating expenses

Interest expense 29,167 24,806Derivative loss 58,379 ―Exchange loss ― 96,452Amortization of net retirement benefit obligation at transition 9,098 ―Miscellaneous expenses 20,944 14,114Total non-operating expenses 117,588 135,372

Ordinary income 694,232 862,272

(Millions of yen)



Special gains

Gain on sales of fixed assets 20,008 9,011

Gain on sales of investment securities 2,022 23,338Gain on contribution of securities to retirement benefit trust 17,725 ―Insurance income ― 5,287Other 4,147 4,762Total special gains 43,902 42,398

Special lossesLoss on sales of fixed assets 3,299 4,937Loss on disposal of fixed assets 17,069 13,274Impairment loss 16,103 42,087Quality-related costs ― 90,700Other 14,242 20,738Total special losses 50,713 171,736

Income before income taxes 687,421 732,934Income taxes–current 224,010 149,920Income taxes–deferred (26,686) 30,221Total income taxes 197,324 180,141Net income 490,097 552,793Net income attributable to non-controlling interests 32,523 28,952Net income attributable to owners of the parent 457,574 523,841


Consolidated statement of cash flows (China JV Equity basis)

(Millions of yen)



Cash flows from operating activitiesIncome before income taxes and minority interests 687,421 732,934Depreciation and amortization (for fixed assets excluding leased vehicles)

398,982 424,881

Depreciation and amortization (for long term prepaid expenses) 28,003 18,666Depreciation and amortization (for leased vehicles) 355,292 389,339Impairment loss 16,103 42,087Gain on contribution of securities to retirement benefit trust (17,725) ―Increase (decrease) in allowance for doubtful receivables 13,471 16,669Loss (gain) for residual value risk of leased vehicles 41,911 53,737Quality-related costs ― 90,700Interest and dividend income (31,748) (32,433)Interest expense 112,823 111,906Equity in losses (earnings) of affiliates (106,513) (122,524)Loss (gain) on sales of fixed assets (16,709) (4,074)Loss on disposal of fixed assets 17,069 13,274Loss (gain) on sales of investment securities (2,022) (23,338)Decrease (increase) in trade notes and accounts receivable (64,118) 15,171Decrease (increase) in sales finance receivables (707,321) (830,209)Decrease (increase) in inventories (82,435) (17,244)Increase (decrease) in trade notes and accounts payable 125,840 217,587Amortization of net retirement benefit obligation at transition 9,098 ―Retirement benefit expenses 26,789 13,581Payments related to net defined benefit assets and liabilities (25,815) (29,854)Other 55,372 55,978Subtotal 833,768 1,136,834Interest and dividends received 25,793 33,222Proceeds from dividends income from affiliates accounted for by equity method

145,780 144,961

Interest paid (114,659) (110,439)Income taxes paid (197,899) (277,565)Net cash provided by operating activities 692,747 927,013

(Millions of yen)



Cash flows from investing activities Net decrease (increase) in short-term investments 3,405 4,855Purchase of fixed assets (513,268) (531,251)Proceeds from sales of fixed assets 88,318 80,320Purchase of leased vehicles (1,070,654) (1,385,990)Proceeds from sales of leased vehicles 537,721 560,861Payments of long-term loans receivable (534) (3,018)Collection of long-term loans receivable 310 8,285Purchase of investment securities (25,591) (24,869)Proceeds from sales of investment securities 6,104 25,192Proceeds from (payments for) sales of subsidiaries' shares resulting in changes in the scope of consolidation

(156) ―

Proceeds from (payments for) purchase of subsidiaries' shares resulting in changes in the scope of consolidation

― (6,354)

Net decrease (increase) in restricted cash (36,258) 44,839Other (11,422) (2,150)Net cash used in investing activities (1,022,025) (1,229,280)

Cash flows from financing activitiesNet increase (decrease) in short-term borrowings 445,170 420,085Proceeds from long-term borrowings 981,970 1,824,367Proceeds from issuance of bonds 325,513 270,592Repayments of long-term borrowings (1,094,942) (1,545,177)Redemption of bonds (238,124) (212,033)Proceeds from non-controlling interests 6,242 4,914Purchase of treasury stock (61) (28,325)Proceeds from sales of treasury stock 618 303Repayments of lease obligations (34,047) (23,093)Cash dividends paid (132,054) (157,239)Cash dividends paid to non-controlling interests (14,389) (23,788)Net cash provided by financing activities 245,896 530,606

Effects of exchange rate changes on cash and cash equivalents 50,660 (45,107)Increase (decrease) in cash and cash equivalents (32,722) 183,232Cash and cash equivalents at beginning of the period 832,716 802,612Increase due to inclusion in consolidation 2,618 6,251Cash and cash equivalents at end of the period 802,612 992,095


エグゼクティブ・コミッティ・メンバー

Chief Executive OfficerChairman and PresidentCarlos Ghosn*

Chief Competitive OfficerVice ChairmanHiroto Saikawa*

Chief Financial OfficerJoseph G. Peter*Finance

Control

IR

M&A Support

Global Sales Finance Business Unit

Administration for Affiliated Companies,

Global IS/IT

Chief Performance OfficerTrevor Mann*Responsible for 6 management committees

Global Aftersales

Global Datsun Business Unit

Chief Planning OfficerPhilippe Klein*Global Product Planning

Global Program Management

Global Market Intelligence

Vehicle Information Technology

Executive Vice PresidentJose Munoz*Region : North America

Executive Vice PresidentKimiyasu Nakamura*Region : Japan, Asia, Oceania

TCSX

(Total Customer Satisfaction Function)

Executive Vice PresidentHideyuki Sakamoto*Product Engineering

Executive Vice PresidentFumiaki Matsumoto*Manufacturing & SCM Operations

Executive Vice PresidentDaniele Schillaci*Global Marketing & Sales

Global Dealer Network

Global Product Marketing

Zero Emission Vehicle &

Battery Business

Executive Vice PresidentTsuyoshi YamaguchiAlliance Technology Development

Executive Vice PresidentYasuhiro YamauchiAlliance Purchasing

EXECUTIVES

Representative Directors

Carlos GhosnPresident and Chairman

Hiroto Saikawa

Greg Kelly

Directors

Hideyuki Sakamoto

Fumiaki Matsumoto

Kimiyasu Nakamura

Auditors

Hidetoshi Imazu

Toshiyuki Nakamura

Motoo Nagai

Shigetoshi Andoh

(As of June 22, 2016)

Senior Vice PresidentsShiro Nakamura

Hitoshi Kawaguchi

Takao Asami

Jun Seki

Jose Luis Valls

Takashi Hata

Paul Willcox

Roland Krueger

Arun Bajaj

Asako Hoshino

Rakesh Kochhar

Hari Nada

Christian Mardrus

Noboru Tateishi

Corporate Vice PresidentsCelso Guiotoko

Joji Tagawa

Vincent Cobee

Yusuke Takahashi

Hiroshi Karube

Keno Kato

Roel De Vries

Tony Laydon

Kunio Nakaguro

Mitsuro Antoku

Naoya Fujimoto

Toshihiro Hirai

Hiroshi Nagaoka

Akihiro Otomo

Atul Pasricha

Nobuya Uranishi

Philippe Guerin-Boutaud

Allan Rushforth

Kent O'Hara

Leon Dorssers

Alfonso Albaisa

Atsuhiko Hayakawa

Yoshikazu Nakai

Kinichi Tanuma

Haruhiko Yoshimura

FellowHaruyoshi Kumura

Shunichi Toyomasu

Vice ChairmanToshiyuki Shiga

(As of end of July 2016)* Executive Committee Members

DIRECTORS OF THE BOARD AND AUDITORS

EXECUTIVE COMMITTEE MEMBERS

CORPORATE OFFICERS

Carlos Ghosn

Jose Munoz

Hiroto Saikawa

Kimiyasu NakamuraPhilippe Klein Hideyuki Sakamoto

Joseph G. Peter

Fumiaki Matsumoto

Trevor Mann

Daniele Schillaci

Toshiyuki Shiga

Jean-Baptiste-Duzan

Bernard Rey


CORPORATE GOVERNANCE & INTERNAL CONTROL

CORPORATE GOVERNANCE SYSTEMNissan believes that enhancing its corporate governance is one of its most important business issues. Ensuring clear management responsibility is a key way to achieve this. Nissan announces clear management targets and policies to all its stakeholders and discloses its performance promptly with a high degree of transparency.

Information regarding the following is provided in the Company’s Sustainability Report.l Corporate Governance System in Detaill Internal Control Systemsl Independent Internal Audits

Details of this section are reported on the Company’s website, “Blue Citizenship: Nissan’s CSR.”

Please see the Sustainability Report and the Current State of Nissan’s Risk Management.

Please see the Current State of Nissan’s Risk Management for more information on risk management.

website

Please see the 2016 Sustainability Report, p. 100, for more information on Corporate Governance & Internal Control.

website

COMPLIANCEIn promoting corporate social responsibility (CSR), it is essential that each employee practices compliance with high ethical standards. In order to raise compliance awareness throughout the Company, Nissan has established a Global Compliance Office, as well as specialized departments, and appointed officers to promote compliance policy in each region where it operates.

Information regarding the following is provided in the Company’s Sustainability Report.l Employees and Compliancel Security-Related Export Controlsl Promoting Thorough Compliancel Nissan’s Stance Against Discrimination and Harassmentl Internal Reporting System for Corporate Soundness

RISK MANAGEMENTNissan defines risks as anything that might prevent it from achieving its business goals. By detecting risks as early as possible, examining them, planning the necessary measures to address them and implementing those measures, the Company works to minimize the materialization of risks as well as the impact they cause.

Information regarding the following is provided in the Company’s Sustainability Report.l Principles for and Approach to Corporate Risk Managementl Protecting Personal Data and Reinforcing Information Security

Information regarding the following is provided in the Current State of Nissan’s Risk Managementl Risks Related to Financial Marketl Risks Related to Business Strategies and Maintenance of

Competitivenessl Business Continuity


http://www.nissan-global.com/EN/DOCUMENT/PDF/SR/2016/SR16_E_RiskMgnt.pdf

http://www.nissan-global.com/EN/DOCUMENT/PDF/SR/2016/SR16_E_P100.pdf

annual report 2016 - nissan motor corporation global · pdf fileit also provides an...

Documents